Every business is different. Whilst general principles do apply, an acquisition can pose many legal questions, which, left unanswered may create problems for an incoming investor/purchaser. Below is a general guide to answering due diligence questions.
The key tool to assessing the viability of an acquisition from a legal standpoint is to collate information, analyse and identify the key considerations of the transaction. This process is called a due diligence.
We advise our clients regularly on the following 22 considerations to a due diligence:
- General Corporate including compliance with the Corporations Act (2001) Cth (it is vital that all corporate documentation including company documents are up-to-date and that the acquisition is permitted under the constitution/board charters by-laws).
- Documentation (the use of correct contracts taking into account a wide range of commercial outcomes is essential);
- Commercial contracts including for example, management and distribution contracts;
- Contractual issues (for example warranties, trade restrictions, indemnity and releases, confidentiality etc);
- Tenders;
- Retention of title;
- Intellectual property (including any patents, trademarks and copyright material);
- Intellectual property ownership/infringement;
- Information technology;
- Real property;
- Employment issues including staff, documentation, claims, occupational health and safety, leave, independent contractors and outsourcing and superannuation;
- Financial contracts and charges;
- Securities which includes charges, mortgages and guarantees);
- Insurance;
- Litigation;
- Environmental/safety advice;
- Financials;
- Trading;
- Customers;
- Suppliers;
- Plant and equipment; and
- Taxation
It is essential to view the acquisitions from a range of commercial stand-points. Many issues may not be apparent and a prudent commercial lawyer will identify key areas of concern.
Lawyers at Stone Group Lawyers, a leading Gold Coast law firm have trained lawyers on the Gold Coast and Brisbane in the areas of business acquisitions. Call us today to discuss your business acquisition on (07) 5635 0180.
